Germany postpones investment conference over uncertainty

By Kazim Alam, The Express Tribune

KARACHI: An investment conference planned by the Pakistan-German Business Forum to be held in June has now been postponed to the end of 2013, German Consul General Dr Tilo Klinner said on Wednesday.

Speaking to journalists after a ceremonial gong striking ceremony at the Karachi Stock Exchange (KSE), Klinner said the reason for the postponement was the uncertain political situation in Pakistan.

“You have to understand that in times of a lot of political volatility, every investor would wait until the situation is a little bit clearer,” he said. “It is not clear whether we will have a standing government in June. So we preferred to move it to the end of the year,” Klinner added. Saying that he expected elections to be conducted as per the schedule, the consul general observed that every investor will wait for the second half of the year before making any investment decisions.

Although foreign portfolio investment (FPI) from Germany in the July-December period of fiscal 2012 was $9.4 million, the corresponding period in fiscal year 2013 witnessed a net outflow of $100,000.

“At least 15 German pharmaceutical companies were listed on the KSE until the mid-2000s. But mergers and acquisitions of these companies in their mother country around six to seven years ago led to their voluntary de-listing from the KSE,” KSE Director Zafar Moti told The Express Tribune. He added that Siemens Pakistan is currently the only German-origin company listed on the Karachi bourse.

Speaking on the occasion, KSE Deputy Managing Director Haroon Askari said that despite little expansion in the economy in terms of GDP over the last three years, the KSE has performed well mainly because of the large undocumented economy.

From 9,386.92 points on December 31, 2009, the KSE-100 Index had ballooned to 16,905.33 points by the end of the session on December 31, 2012, which translates into an increase of 21.6% per annum from 2010 to 2012. “Any other market would have crashed, had it faced so much turmoil so frequently for three years in a row,” he observed.

Dismissing the impression that German companies are not interested in investing in Pakistan, the consul general promised that both direct and portfolio investment from Germany will increase in the post-election scenario.

“(German companies) have a lot of interest here. Linde has taken over BOC’s business, which is a major investment. Companies like Merck are also developing their presence here,” he said, adding that the KSE will grow faster once law and order is restored in Karachi.

Published in The Express Tribune, February 7, 2013.

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